IMF forecasts 7.5 pct economic growth for Mozambique in 2014

7 November 2014

The International Monetary Fund (IMF) projects that the Mozambican economy will grow by 7.5 percent this year, down nearly one percentage point from the previous forecast, which indicated an increase of 8.3 percent, the IMF said Wednesday in Maputo.

In the findings of the Third Assessment of the Policy Support Instrument (PSI), agreed by the Mozambican government with the IMF in June 2013, the IMF technical mission said Mozambique’s economic performance will remain “robust” in 2014 and in 2015, with the economy registering growth of 7.5 percent in both years.

The IMF maintains its projections based on “strong economic activity” seen in all economic sectors, particularly in mining, construction, transport and communications, trade and financial services and noted the main risks were declining commodity prices in international markets, particularly coal, and uncertainty related to major natural gas projects planned for the northern region of the country and due to start after 2018.

After pointing to an average annual inflation of 4.6 percent in its previous assessment, the IMF now believes that this indicator “remains contained” as a result of increased domestic food production and the decline in the price of imports, and expects the country to end the year with an inflation rate “below 3 percent.”

The various commitments made by the Government during the third review of the PSI include strengthening management of public companies, as well as the publication of annual reports of the largest state-owned enterprises including tuna company Ematum, to which the State provided a financial guarantee of US$850 million in 2013, representing about 6 percent of GDP. (macauhub/MZ)